Correlation Between UNITEDHEALTH and Simon Property

Can any of the company-specific risk be diversified away by investing in both UNITEDHEALTH and Simon Property at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining UNITEDHEALTH and Simon Property into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between UNITEDHEALTH GROUP INC and Simon Property Group, you can compare the effects of market volatilities on UNITEDHEALTH and Simon Property and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in UNITEDHEALTH with a short position of Simon Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNITEDHEALTH and Simon Property.

Diversification Opportunities for UNITEDHEALTH and Simon Property

-0.5

Correlation Coefficient

UNITEDHEALTH  Simon Property

Very good diversification

The 3 months correlation between UNITEDHEALTH and Simon is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding UNITEDHEALTH GROUP INC and Simon Property Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simon Property Group and UNITEDHEALTH is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on UNITEDHEALTH GROUP INC are associated (or correlated) with Simon Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simon Property Group has no effect on the direction of UNITEDHEALTH i.e., UNITEDHEALTH and Simon Property go up and down completely randomly.

Pair Corralation between UNITEDHEALTH and Simon Property

Assuming the 90 days trading horizon UNITEDHEALTH GROUP INC is expected to under-perform the Simon Property. But the bond apears to be less risky and, when comparing its historical volatility, UNITEDHEALTH GROUP INC is 1.05 times less risky than Simon Property. The bond trades about -0.14 of its potential returns per unit of risk. The Simon Property Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  17,878  in Simon Property Group on September 18, 2024 and sell it today you would earn a total of  118.00  from holding Simon Property Group or generate 0.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

UNITEDHEALTH GROUP INC  vs.  Simon Property Group

UNITEDHEALTH GROUP INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UNITEDHEALTH GROUP INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for UNITEDHEALTH GROUP INC investors.

Simon Property Group

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Simon Property Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Simon Property may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with UNITEDHEALTH and Simon Property

The main advantage of trading using opposite UNITEDHEALTH and Simon Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNITEDHEALTH position performs unexpectedly, Simon Property can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Simon Property will offset losses from the drop in Simon Property's long position.

The idea behind UNITEDHEALTH GROUP INC and Simon Property Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.